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Oclaro: Quit QSFP28 CWDM4, focusing on coherent DCO, 400G modules

Date:Feb 7,2018
Greg Doherty, chief executive of Oclaro Inc., revealed on an analyst's phone that he had decided to abandon the further development of the 100G QSFP28 CWDM4 optical transceiver. Instead, Oclaro will focus on its module-developed Digital Coherent Optical (DCO) and PAM4-enabled QSFP56-DD 400 Gigabit Ethernet devices, which will be on display at OFC 2018 in San Diego next month.
Doherty said: "Most QSFP28 revenue from the company currently comes from 100GBASE-LR4 transceivers.When it comes to CWDM4 QSFP28, we still see many low spec models on the market unhealthy pricing behavior.Oclaro will only support the current CWDM4 optical transceiver client."
Overall, Doherty does not see much growth in 100G client transceivers. He pointed out that the revenue of such transceivers (including CFP and QSFP family modules) dropped 15 million U.S. dollars in the second quarter recently ended; he expects third-quarter sales to drop by another 13 million U.S. dollars. In addition, Doherty predicts that revenue from 100-Gbps client transceivers will continue to decline in the remainder of 2018.
Doherty is more optimistic about the 400G radio equipment, he said in 2019 this market will reach 280 million US dollars, by 2020 will grow to 720 million US dollars. Oclaro will begin shipping 400G QSFP56-DD transceivers this calendar year.
Oclaro is one of three companies that partnered with Ciena to develop related modules based on Ciena's WaveLogic Ai coherent DSP. When the partnership was announced, their original goal was to get the 5x7-inch module to market first. However, Oclaro's OFC source for 2017 shows that the company is also interested in the small package of DCO modules. Doherty said that Oclaro should ship the DCO module early in 2019 and that the company has multiple DCO products on its roadmap. Not all products use Ciena DSPs. These modules will target 400-Gbps and 1.2-tbps applications.
Doherty noted that China's system customers have expressed interest in creating their own DCO modules, which will provide Oclaro with a market for ICT / ICR and tunable laser components. This business opportunity appears under the background that the Chinese government plans to step up the development of China's optical communications. In response to an analyst's question, Doherty said he believes China's move will not cause any significant damage to Oclaro's long-term prospects.
"We think China will have strong performance at the module level and may support clients in the 5G and access markets. We have been supplying chips and we will continue to supply laser chips, which for us will be a lucrative Market, "Doherty said. "In the high-end market, we can not see that they will soon become the main players in the high-end market, especially in the coherent."

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